This new regulatory trend, which is gaining steam even faster than Ban the Box, prevents employers from asking about candidates’ prior salary history in an effort to eliminate gender-based salary disparities.
Both regulatory trends have noble goals, but their implementations have been confoundingly complex. “It has become another patchwork law, that is applied differently in different states, cities and municipalities,” said Dawn Standerwick, vice president of strategic growth for Employment Screening Resources.
In some cases, state or city rules conflict with federal rules, and the adoption and interpretation of these rules and how to comply with them is changing constantly.
For example, with Ban the Box — the campaign by civil rights groups and advocates aimed at removing the check box on hiring applications that asks if applicants have a criminal record — some cities say you absolutely must consider everyone who applies, however state rules say you cannot hire people with certain types of criminal records for roles supporting vulnerable populations, or that require driving a vehicle.
“Understanding what these rules mean is a challenge for a lot of companies,” said Mary O’Loughlin, managing director for health care and life sciences for HireRight. Platforms need to be customized to only pull information about candidates where it’s allowed and to send the proper alerts to candidates when the information is being reviewed.
What’s worse, many companies falsely assume their background screeners have it all covered. “They think it’s the responsibility of their background screener to automatically do it for them,” she said.
They are wrong. Every vendor agreement lays out the details of what the vendor will provide, including screenings and required notices and waivers to employees. But as these regulations get more complicated, many vendors are rethinking the services they provide.
“It used to be background screeners handled most of the notices and disclosures,” Standerwick said. But some vendors have begun leaving these steps out of their contracts because following these rules has gotten so complex. She noted that in 2001 there were fewer than 500 Fair Credit Reporting Act class-action lawsuits, but in the past year there have already been more than 5,000.
“Even if it is just a technical violation on a waiver of disclosure, if you sent 1,000 waivers it could cost you $1,000 per waiver,” she said.
These frustrations are driving new innovation. Many of the technical evolutions in this space are designed to improve the candidate experience, while ensuring employers are protected, said Lou Paglia, president of Sterling.
The rise in gig worker platforms in particular is driving companies to adopt biometric screening tools, simplified mobile log-in features and identity authentication to speed the process and make it more user-friendly while ensuring every applicant is who they say they are.
The rise of gig workers has also forced screening vendors to innovate their back-end technology to integrate with more hiring platforms and talent pools, he said. “The gig worker hiring workflow may be totally remote, but you still need to follow the right processes.”
Screening is especially important for customer-facing gig workers, like ride-share drivers and food delivery people, added Standerwick.
“Consumers have a false sense of security that these workers have been vetted,” she said. “But doing a database screen is not comprehensive enough.”
She anticipates concerns that consumer safety will drive increased investment in background screening by gig worker platforms. “It’s too soon to say there is a market-shift happening, but companies are definitely concerned.”
The resounding advice from experts — whether they are hiring full time employees or contract workers — is to be sure your processes are thorough, compliant and user-friendly.
O’Loughlin advises her clients to create a formal screening policy for all new hires with feedback from HR, legal, vendor management and talent management to determine what is acceptable, and what can they do to accelerate the process without making regulatory mistakes.
“Have your legal counsel review your contract,” Standerwick warned. “A lot of companies don’t realize just how wrong this process can go.”
Editor’s note: Sterling Talent Solutions’ name was changed to Sterling after this story posted to reflect its recent name change.